Should the maintenance department get another full-time worker?
Should firefighters get a raise?
How should the city pay to rebuild roads that have deteriorated beyond repair?
The Scandia council will deal with these questions and more as it works through the 2014 budget.
The process began at a council work session on Tuesday, Aug. 13. Two more budget work sessions, on Aug. 27 and Sept. 10, will be held before the council certifies the maximum proposed tax levy to the county auditor. The final tax levy and budget will be adopted at the council meeting on Tuesday, Dec. 17.
The draft budget calls for a total property tax levy of $2,171,074, the same as in 2013. The levy increased 67 percent from 2004 to 2013 (10 years), or 75 percent since 2003 (11 years). The levy brings in 80 percent of the city’s revenue.
The total proposed budget of $2,551,386 includes $351,874 for debt service, $115,750 for capital improvements, and $123,047 for sewer systems. The remainder, $1,906,716, goes to general fund expenditures including administration, police, fire and public works.
Legal expenses are predicted to decrease in 2014, from $70,000 to $36,000, Handt said, the result of changing law firms and consulting the attorney less often. “I don’t go to the attorney until the issue is before the council,” she said. “My approach is let’s wait and see.”
The recent administrator’s salary increase and planned 2 percent step increases for staff affect the personnel budget.
Another change is that staff time will be charged to the city-run sewer systems. Council member Chris Ness pointed out that under this proposal $18,000 of income goes toward salaries and will not be available for sewer maintenance and repairs. The most recent rate increase was sold with the promise that money would be put aside for future sewer needs, he said. “Now I’ll hear, ‘You’re paying city wages with it.’”
“We were underestimating the amount of time staff puts into sewer,” Handt explained. “This is a more accurate reflection of the actual costs.”
The public works department has a director, three full-time workers and seasonal employees. The budget proposal includes funding for one new full-time maintenance worker.
“It’s not a big town, but large in square miles,” Public Works Director Tim Kieffer said. “It takes money, men, and equipment to get the city to where I think it should be.”
Scandia has a population of about 4,000, with 90 miles of city streets.
Since 2010, when Scandia paid $131,659 to staff the public works department, the amount has almost doubled. Estimated expenditures for 2013 are $256,377. Hiring another full-time worker would bring the total to staff the department to $301,395, a 229 percent increase in five years.
Kieffer prepared a detailed memo to the council explaining the need for another worker. In addition to summer mowing and winter snow plowing, the maintenance crew is faced with roads, ditches and culverts that have not been maintained. Sewer maintenance tasks that were done by the county are being taken over by city staff.
“We’re open to suggestions on how we can meet the expectations of the public with the staff we have,” City Administrator Kristina Handt said. The council discussed using more part-time workers and hiring out more services as alternatives to hiring another full-time worker.
“Things obviously were not getting done: Roads were not patched, sewers were grossly neglected,” Ness said. “We do need to catch up, but sometimes enough is enough. Do we need another employee?”
Council member Jim Schneider said, “What I’m concerned about is you’ll be asking for a backhoe, a roller, a paving machine. Then we’ll need an equipment replacement schedule. Scandia isn’t growing that much. We’re getting ourselves into a bind.”
Mayor Randall Simonson said the council is setting the public works department up for failure by, for example, requiring 12 miles per year of tree trimming but not providing enough personnel. Last year staff completed one mile of tree trimming.
Police and fire
The police contract with Washington County will cost 2.8 percent more in 2014, budgeted at $122,068. One sheriff’s deputy is assigned to Scandia for five days a week. The city gets about $16,000 a year from tickets the deputy writes in Scandia. He also investigates burglaries, deals with loose horses, etc.
The fire department is projected to cost the city $308,418 in 2014. This includes a 2 percent wage increase. The city receives revenue from a contract to provide fire service to part of May Township.
The fire department is 25 volunteers who receive free training and are paid an hourly rate for the calls they attend. “We’re trying to get to 30, but they’re retiring as fast as we’re taking them on,” Fire Chief Mike Hinz said.
Lakeview Ambulance supplies cervical collars and masks, so the medical equipment expenditure was reduced from $3,000 to $1,250. Lakeview does not pay rent for using fire hall space.
This year the city will require Firefighter 1 but not medical training for new recruits. Hinz said the Lakeview Ambulance presence has improved the EMT training. “They bring a $25,000 robot to train us.”
The fire department spends $100 a month on a catered dinner following a training session. Hinz and Assistant Chief Bill Havener defended the expense, saying it’s a small perk for the crew who come straight from work and stay until 10 p.m.
Council members questioned the amount budgeted for a new microwave, desk and AV equipment.
To pay for the annual $300,000 in road maintenance the proposed budget uses $200,000 from the general fund and $100,000 from the 2014 levy.
The council also looked at the five-year capital improvement plan, which includes a $2,000,000 street improvement project in 2013.
Since 2002 Scandia has had a bituminous surfacing policy that calls for paving all collector and nearly all non-collector roads. Residents along those roads are assessed part of the cost, with the city paying more on a collector road. Once a road has been paved, the city pays the entire maintenance cost.
But Scandia does not have policy in place for who pays when a paved road needs to be rebuilt. If the city saves up enough in advance to pay cash, no cost sharing is needed. But if the city borrows money to rebuild a road, by law some of the cost must be assessed to affected property owners.
“If we don’t have to assess, I’d just as soon not go back and charge people again,” Schneider said.
“There should be some level of assessment,” Ness argued.
“The city can’t guarantee for life that you’ll have a road,” Sally Swanson added.
Mayor Randall Simonson agreed. “The promises made before were irresponsible,” he said. Referring to the recent project to extend the life of the current pavement on Melanie Trail, Simonson said, “We told the Melanie residents that this was a five-year fix: Start saving.”
City engineer Ryan Goodman recommended grouping road reconstruction into a few big projects for economy of scale.
To avoid borrowing money for road replacement, the city could save $100,000 a year toward a $1 million project every 10 years. Goodman pointed out that inflation can cause a substantial increase in the cost. Material that costs $30 per ton a few years ago is $58 per ton now, he said.
A third option, besides saving up to pay cash or borrowing and assessing, is to use franchise fees. A franchise fee is a city charge imposed on utility and cable providers to operate in the public right-of-way. The utility and cable providers pass these charges on to the customer.
In Forest Lake, residential customers have been paying a $4 franchise fee every month since May of 2013. The money is paid to the gas or electric company and raises about $700,000 per year for Forest Lake to spend on street maintenance and improvement. Forest Lake has a population of about 18,000 and over 100 miles of roads. Scandia could raise an estimated $70,000 to $75,000 using this method.
“It’s another tool cities are using,” City Engineer Ryan Goodman said. “Streets were neglected, the cost of bituminous has gone up, and some cities’ levies were capped.”
Fire Chief Hinz wanted the city to cover the cost of rebuilding roads. “Residents don’t expect to ever pay again for blacktop road,” he said. He also pointed out that Scandia has state and county highways, which do not assess residents directly. “None of them are paying a dime.”
The mayor was reluctant to add a new fee. “A small franchise fee may not be received too well,” he said.
Schneider was against the idea. “A little added-on fee irritates the hell out of people, more than an assessment,” he said. “My answer is cut other places.”
The council will look at a new policy proposal for new and reconstructed roads.